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Eli Lilly: The Evista Project®

In early 1998 Dr. August “Gus” Watanabe, executive vice president of science and technology for Eli Lilly and president of Lilly Research Laboratories (see Exhibits 1 and 2), looked out his office window toward downtown Indianapolis. He was contemplating the future commercialization path for Lilly’s new, potential blockbuster drug, Evista®, which had received FDA approval on December 9, 1997, for the prevention of post-menopausal osteoporosis. Evista®, generically known as raloxifene hydrochloride, would be entering the estrogen replacement market, a market that had worldwide sales in excess of $1 billion in 1997.[1]

Of even wider significance was the fact that in initial trials, Evista® appeared to lower the incidence of breast cancer and reduced total LDL in post-menopausal women without the negative side effect profiles of currently available estrogen replacement therapies. The potential of this new therapeutic and its impact on Lilly could be enormous. Some analysts predicted that Evista® might become a $1B drug for the company.[2] With this in mind, Watanabe knew that the decision on how best to commercialize Evista® would have a profound effect on Lilly’s well-being. Should Lilly follow its traditional approach to commercialization? Or should Lilly follow a course more in line with the development approach adopted for Evista® in early 1995, which would require the organization to transform its heavyweight product development team into a focused product (commercialization) team? In a senior management meeting later in the day, Watanabe would have to make a recommendation.

Company Background

Eli Lilly and Company was incorporated in 1901 to pursue the drug manufacturing business founded in Indianapolis, Indiana, in 1876 by Colonel Eli Lilly. A pharmaceutical chemist and a U.S. Civil

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